A vast Rolex flagship, originally planned to open this year on London’s Bond Street, has been delayed until first half of 2024, according to Watches of Switzerland, which will own and operate the showroom.
Timing for the opening of the store was always tentative.
When WatchPro broke news of the opening in the summer of 2022, WoSG CEO Brian Duffy said the plan was to take possession of the site in 2023 with the aim of opening in the same year.
The Rolex emporium will occupy the corner building currently housing Gucci at 34 Old Bond Street and is expected to have 7,200 square feet of retail space over three floors.
The delay to 2024 appears mainly to be due to Gucci taking longer than anticipated to vacate the No.34 site.
The fashion giant is relocating further up Bond Street, but the new store is still concealed behind a vast scaffolding facade.
All change for Rolex
It is all change for Rolex on Bond Street.
Wempe closed its showroom on the famous luxury retail thoroughfare earlier this year after losing the Rolex agency.
Watches of Switzerland currently runs a small 900 square foot boutique, which will be reassigned or closed when the Rolex flagship opens.
Multibrand Mappin & Webb, on the corner of Bond Street and Piccadilly, is currently a Rolex authorised dealer, but that site is being redeveloped to make way for a Tudor flagship.
Record sales
News of the Rolex flagship delay and the Tudor showroom was shared along with the end of year financial results for The Watches of Switzerland Group.
Group revenue for the year to the end of April 2023 was in line with previous forecasts at £1,543 million, up 19% at constant currency, and 25% at reported rates thanks to the strength of the dollar when its US results are reported into UK accounts.
Sales in the UK and Europe rose by 10% to £890 million while US revenue rose by 35% at constant currency to £653 million.
Luxury watch revenue for the group was up 28%, thanks to greater volume of sales and higher prices.
Despite economic headwinds, margins improved slightly over the year, delivering estimated EBIT of £163 million to £167 million (FY22: £130 million).
In guidance for the current financial year, the group says it expects a slight drop in sales for the first quarter from May to July but a stronger second half as macro economic conditions improve will see full year turnover increase by 8-11% to £1.65 to £1.7 billion.
WoSG’s share price dropped by 13% as the results were announced but recovered through the morning to be down around 8% at 685p.
The share price has more than halved since peaking in December of 2021 at 1,470p.
Mergers & Acquisitions
Mr Duffy says the group is actively pursuing acquisitions, particularly in the United States and Continental Europe, but these potential acquisitions are not factored into the 2024 forecast.
What is factored in is the continuing expansion and upgrading of its retail network.
This financial year will see the opening of a new Watches of Switzerland multibrand showroom in American Dream, New Jersey, opening in the next few weeks and and another at One Vanderbilt, New York, in January 2024.
In Europe, the group will open its first Watches of Switzerland-branded showroom in Europe in the Mall of the Netherlands, The Hague, at the end of 2023.
It has also entered a joint venture with Audemars Piguet to open an AP House in Manchester early next year.
Upgrades are continuing for Goldsmiths showrooms in the UK and their equivalent Mayors properties in Florida.
There is also going to be a new luxury showroom concept launched for Mappin & Webb.
Fewer Patek Philippe doors
In a conference call with analysts this morning, Mr Duffy disclosed that the group would be losing some Patek Philippe doors as part of the brand’s consolidation into 30% fewer locations.
Mr Duffy said he supported the move by Patek Philippe and would be expanding and upgrading the space WoSG devotes to the brand in the remaining locations. He would not be drawn on which doors would be lost, but said that he expects the same quantity of watches to be allocated to Watches of Switzerland after the consolidation.
“The decision from Patek Philippe makes sense. With production capped at around 70,000 watches, which could be sold three times over, it is better to concentrate on the most desirable spaces,” Mr Duffy said.
He also suggested that Patek Philippe coming out of some locations would be an opportunity for other brands to increase their presence.
Rolex Certified Pre-Owned
Watches of Switzerland confirmed that it will start working with Rolex as part of its Certified Pre-Owned Programme in the first quarter of 2024 in the United States and in the second quarter in the UK.
“Typical of Rolex, the rollout is very deliberate and detailed, but we are very excited about the opportunity,” Mr Duffy describes.
There will be a “big CPO statement” in the new Rolex flagship opening on Bond Street, he reveals.
Asked how big an opportunity Rolex CPO might be, Mr Duffy said it offers significant growth potential, but that a shortage of trained watchmakers means demand will be greater than capacity.
All watches in the programme need to be serviced and authenticated by Rolex or one of its authorised dealers before they can go back on sale with the Rolex-backed two year international warranty.
